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A Grossly Defective Product. How Strong Is The Economy Really?

A few years ago, Paul Wallace penned an article entitled: “GDP Is A Grossly Defective Product.” The recent release of the Q2-2020 report reminded me of it as the media fawned over the 7.6% print.

“Yet despite its theoretical appeal, GDP is,…

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A few years ago, Paul Wallace penned an article entitled: “GDP Is A Grossly Defective Product.” The recent release of the Q2-2020 report reminded me of it as the media fawned over the 7.6% print.

“Yet despite its theoretical appeal, GDP is, in practice, a fallible measure. It is increasingly becoming one that could be described as a grossly defective product. 

While seemingly strong at the headline, the recent report leaves much to be desired when looking below the surface.

Estimates Missed By A Mile

The headline print of 6.35% was one of the most robust rates of “annualized” growth since the early 1980s. However, there are two significant takeaways from this data. First, while the growth rate is impressive, it is $5 trillion in Government spending during the recession that boosted growth. (Chart below is current through Q2 and estimated through Q4)

Secondly, the growth rate is substantially weaker than earlier estimates of more than 13% and a full percentage point lower than the Atlanta Fed’s GDPNow forecast of 7.6%. It also likely represents the peak of the economic recovery. (This is a topic we will address more next week.)

Over the next two quarters, the rates of economic growth will continue to weaken. Such will be due to the massive amounts of direct stimulus fading from the system.

By late 2022 the economic growth rate will likely set a new lower growth trend below 2%. Such will be weaker than the growth trends before the past two “real” economic recessions.

As is always the case, economists and analysts are always overly optimistic in their assessments. But, while being overly optimistic is undoubtedly a media preference, it leads to potential misallocations of capital by investors.

Yields Had It Right After All

As discussed in April, when estimates were for 13% GDP growth, bond yields signaled a peak of economic growth. To wit:

As shown, the correlation between rates and the economic composite suggests current expectations of economic expansion are overly optimistic. At current rates, economic growth will likely very quickly return to sub-2% growth by 2022.”

Since then, yields have continued to drop, along with the yield curve flattening. Historically, yields are a strong predictor of economic growth and inflation. However, as stated previously, disinflation is more likely than accelerating inflation. 

“With the base effects now exhausted, the cyclical, structural, and monetary considerations suggest inflation will decline by year-end. Thus, the ‘inflationary psychosis’ gripping the bond market already reversed as the realization of slower economic growth occurs.”

Bulls Buy Dip 07-23-21, Bulls “Buy The Dip” But Is The Risk Really Over? 07-23-21

Of course, such is problematic for the Federal Reserve. The current program of $120 billion a month in monetary injections only maintains economic growth. But, unfortunately, those monetary interventions are not translating into “economic activity” either directly or indirectly.

Each time the Fed has engaged in QE programs, the banks ‘hoard’ those reserves as the ‘risk/reward’ of loaning money into the economy is not justified. For example, in early 2020, as the economy was ‘shut down’ due to the COVID pandemic, companies tapped credit lines at their banks to ensure sufficient capitalization. After that initial surge in lending activity, banks reversed back into a more ‘protectionary’ mode.”

Monetary Policy Expansionary, #MacroView: Monetary Policy Is Not Expansionary.

QE programs have NOT been effective at creating organic economic growth. However, they were effective at boosting asset prices and providing an illusory wealth effect. 

The Fed faces a challenge in trying to “taper” asset purchases. While there is more robust economic growth, a bubbling housing market, and falling unemployment, can they remove the economic “life support?” Some alternative measures suggest such may not be the case.

Alternative Measures Of Economic Growth

While mainstream economists suggest the economy is booming based on the more mainstream economic data, other data suggests such may not be the case.

It is important to note that America’s economic performance peaked in the late 1990s. Thus, the erosion in crucial economic indicators such as the rate of economic growth, productivity growth, job growth, and investment began well before the Great Recession.

A look at labor force participation, the proportion of Americans in the productive workforce peaked in 1997.

With fewer working-age men and women in the workforce, per-capita income continues to decline. Not surprisingly, median real household income remains muted well below the actual cost of living, with incomes stagnating across the bottom 80% of income earners. 

Moreover, stagnating income and limited job prospects have disproportionately affected lower-income and lower-skilled Americans, leading to household inequality.

Lastly, the U.S. lacks an economic strategy, especially at the federal and Governmental levels. The implicit strategy remains trusting the Federal Reserve to solve our problems through monetary policy. However, the rise in wealth inequality has fostered demands to transform the U.S. into a “socialistic” economy.

Neither strategy has ever solved the problems of those with the least who were promised the most.

Conclusion

As noted, the Federal Reserve is trapped. The Federal Reserve needs more substantial economic growth to justify raising interest rates. After all, the reason the Fed tightens monetary policy is to SLOW economic growth to mitigate the potential of surging inflationary pressures. The problem currently is that the Fed is discussing raising interest rates in an environment of weakening economic growth and disinflationary headwinds.

Currently, employment and wage growth remain weak, 1-in-3 Americans are on Government subsidies, and the majority of American’s are living paycheck-to-paycheck. Such is why Central Banks, globally, are aggressively monetizing debt to keep growth from stalling out. However, many analysts and economists have currently increased the odds of the Fed hiking rates by next year. The belief is that economic growth can continue to accelerate despite the tighter monetary policy.

Most of the analysis overlooks the level of economic growth at the beginning of interest rate hikes. The Federal Reserve uses monetary policy tools to slow economic growth and ease inflationary pressures by tightening monetary supply. For the last decade, the Federal Reserve has flooded the financial system to boost asset prices in hopes of spurring economic growth and inflation.

As stated, outside of inflated asset prices, there is little evidence of real economic growth as witnessed by an average annual GDP growth rate of just 1.1%.

While the mainstream media may indeed tout the “greatest economic growth rate in decades,” the pervasive weakness below the headlines will continue to erode projections.

The problem for investors is the inflation of assets prices far beyond what the actual economy can generate in terms of future revenue and earnings growth.

The re-alignment between overly bullish expectations and a “Grossly Defective Product” will likely be more painful than most expect.

The post A Grossly Defective Product. How Strong Is The Economy Really? appeared first on RIA.

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Addressing the HIV epidemic in Eastern Europe and Central Asia

Working in partnership will be key, says Alex Kalomparis, vice president, public affairs, international at Gilead Sciences. 2021
The post Addressing the HIV epidemic in Eastern Europe and Central Asia appeared first on .

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Working in partnership will be key, says Alex Kalomparis, vice president, public affairs, international at Gilead Sciences.

2021 marks 40 years since the first cases of HIV were reported. In that time, over 79 million people have been diagnosed with HIV, with more than 36 million dying from AIDS-related illnesses, more than any other infectious disease.

While there has been incredible progress in the HIV response, nearly 38 million people are living with HIV, with more than a million new cases every year, jeopardising the goal to end AIDS as a public health threat by 2030.

HIV places enormous burdens on the communities it affects most, straining health systems and government budgets. In the era of the global COVID-19 pandemic, where health systems are already stretched to breaking, it is tempting to cut costs in other areas, including HIV. If commitment to the HIV response wanes, the progress we have made is at risk, leading to increases in new infections in regions that can least afford to tackle them.

“An epidemic somewhere is an epidemic everywhere”

Throughout the COVID-19 pandemic, we have seen the temptation to focus on one’s own backyard, isolate oneself from the rest of the world, and believe one is safe and protected. We know now that this protection is an illusion. Regardless of the protections we erect in our own countries, allowing public health crises to persist in other parts of the world threatens our own progress and safety.

The message is clear: an epidemic somewhere is an epidemic everywhere. To find our way out of a pandemic, we must broaden our ideas of how to respond, and address the problems and inequities that allow diseases to thrive in other parts of the world. To be effective, our response must be global.

The same is true for HIV. HIV has persisted for 40 years, and is still here because root problems continue to drive the epidemic: stigma and discrimination, poverty, lack of access to services and treatments, lack of access to education, and the marginalisation of the people and communities most at risk of HIV. These are not issues that can be addressed by any one government, group, or company. They can be addressed only in partnership with one another, and by engaging those key marginalised communities in our effort to end the HIV epidemic.

Whilst the global community has the tools it needs to meaningfully address new HIV infections, HIV is on the rise in Eastern Europe and Central Asia (EECA). Unlike other regions in the world, rates of HIV in EECA have increased, with infections up by 72 per cent, and AIDS-related deaths up by 24 per cent since 2010.

Working with the Elton John AIDS Foundation

However, across EECA, a range of community partners are making significant contributions in the fight against HIV, such as the first wave of the RADIAN ‘Unmet Need’ fund and Model City grantees, previously announced in 2020. In the first nine months of the programme, these partners have already reached more than 12,000 people from vulnerable communities directly with services, initiating life-saving care in over 2,000 people living with HIV.

RADIAN, a ground-breaking partnership between Gilead Sciences and the Elton John AIDS Foundation, works with local experts to target new HIV infections and deaths from AIDS-related illnesses in EECA in the communities most vulnerable to HIV.

Focusing on the groups most affected by HIV in EECA (eg men who have sex with men, transgender people, sex workers, and people who use drugs), RADIAN engages with groups led by these communities and are sensitive to the difficulties unique to the region.

“We all have one common goal: ending HIV”

Anne Aslett, CEO of the Elton John AIDS Foundation, is clear that for the partnership to reach its goals, it’s crucial to listen to and amplify the voices of people for whom HIV is a tangible, daily reality.

“They understand better than anyone the challenges associated with the virus, and what works to stop it. No matter where we are in the world, we must partner with them, and follow their leadership. We are proud of our RADIAN partnership with Gilead, to champion the vital work of communities to bring an end to the AIDS epidemic in Eastern Europe and Central Asia.”

Companies like Gilead Sciences provide industry leading expertise, while Governments bring an understanding of health systems and funding, developing an infrastructure that enables access.

However, these efforts need community leadership because they know best how to ensure people can access those systems to get tested, and adhere to medication. They understand the fears and sensitivities, the strengths and stigma within those communities, the nuances that make the difference in linking their members to the care they need. No two regions of the world experience the ‘same’ HIV epidemic. People living with HIV are critical to the success of any HIV response.

This autumn, RADIAN will launch a campaign telling the inspirational stories of ordinary, yet remarkable, community members who are taking action to turn the tide of the HIV epidemic in EECA.

We all have one common goal: ending HIV. It is crucial that we all understand the role we can play to achieve this. Our access to global networks of public health expertise, government funding, and innovative HIV treatments are meaningless unless they are used in service of people living with, and at risk of, HIV. They are the core of any successful response, regardless of country or region. Working in partnership with them is the key to ending HIV. By respecting them as leaders and giving them the seat at the head of the table, we make our work more effective and responsive to local needs, bringing us closer to the end of the HIV epidemic globally.

About the author 

Alex Kalomparis is vice president, public affairs, international at Gilead Sciences. He joined the company in January 2017 and is responsible for all communications and patient advocacy activities across Africa, Asia, Australia, Canada, Europe, Latin America and the Middle East. Prior to that Alex held senior communication roles with a number of consumer and pharmaceutical companies, including Unilever, Rolls Royce, Novartis, Roche, AstraZeneca and GlaxoSmithKline.

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Evidence shows that, yes, masks prevent COVID-19 – and surgical masks are the way to go

Since the coronaviurs first began spreading around the globe, people have debated how effective masks are at preventing COVID-19. A year and a half in, what does the evidence show?

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What type of mask is best? Brais Seara/Moment via Getty Images

Do masks work? And if so, should you reach for an N95, a surgical mask, a cloth mask or a gaiter?

Over the past year and a half, researchers have produced a lot of laboratory, model-based and observational evidence on the effectiveness of masks. For many people it has understandably been hard to keep track of what works and what doesn’t.

I’m an assistant professor of environmental health sciences. I, too, have wondered about the answers to these questions, and earlier this year I led a study that examined the research about which materials are best.

Recently, I was part of the largest randomized controlled trial to date testing the effectiveness of mask-wearing. The study has yet to be peer reviewed but has been well received by the medical community. What we found provides gold-standard evidence that confirms previous research: Wearing masks, particularly surgical masks, prevents COVID-19.

Laboratory studies help scientists understand the physics of masks and spread.

Lab and observational studies

People have been using masks to protect themselves from contracting diseases since the Manchurian outbreak of plague in 1910.

During the coronavirus pandemic, the focus has been on masks as a way of preventing infected persons from contaminating the air around them – called source control. Recent laboratory evidence supports this idea. In April 2020, researchers showed that people infected with a coronavirus – but not SARS-CoV-2 – exhaled less coronavirus RNA into the air around them if they wore a mask. A number of additional laboratory studies have also supported the efficacy of masks.

Out in the real world, many epidemiologists have examined the impact of masking and mask policies to see if masks help slow the spread of COVID-19. One observational study – meaning it was not a controlled study with people wearing or not wearing masks – published in late 2020 looked at demographics, testing, lockdowns and mask-wearing in 196 countries. The researchers found that after controlling for other factors, countries with cultural norms or policies that supported mask-wearing saw weekly per capita coronavirus mortality increase 16% during outbreaks, compared with a 62% weekly increase in countries without mask-wearing norms.

A man wearing a surgical mask handing a mask to a woman working at a vegetable stand.
Researchers gave surgical masks to adults in 200 villages in Bangladesh to test whether they reduce COVID-19. Innovations for Poverty Action, CC BY-ND

Large-scale randomized mask-wearing

Laboratory, observational and modeling studies, have consistently supported the value of many types of masks. But these approaches are not as strong as large-scale randomized controlled trials among the general public, which compare groups after the intervention has been implemented in some randomly selected groups and not implemented in comparison groups. One such study done in Denmark in early 2020 was inconclusive, but it was relatively small and relied on participants to self-report mask-wearing.

From November 2020 to April 2021, my colleagues Jason Abaluck, Ahmed Mushfiq Mobarak, Stephen P. Luby, Ashley Styczynski and I – in close collaboration with partners in the Bangladeshi government and the research nonprofit Innovations for Poverty Action – conducted a large-scale randomized controlled trial on masking in Bangladesh. Our goals were to learn the best ways to increase mask-wearing without a mandate, understand the effect of mask-wearing on COVID-19, and compare cloth masks and surgical masks.

The study involved 341,126 adults in 600 villages in rural Bangladesh. In 300 villages we did not promote masks, and people continued wearing masks, or not, as they had before. In 200 villages we promoted the use of surgical masks, and in 100 villages we promoted cloth masks, testing a number of different outreach strategies in each group.

Over the course of eight weeks, our team distributed free masks to each adult in the mask groups at their homes, provided information about the risks of COVID-19 and the value of mask-wearing. We also worked with community and religious leaders to model and promote mask-wearing and hired staff to walk around the village and politely ask people who were not wearing a mask to put one on. Plainclothes staff recorded whether people wore masks properly over their mouth and nose, improperly or not at all.

Both five weeks and nine weeks after starting the study, we collected data from all adults on symptoms of COVID-19 during the study period. If a person reported any symptoms of COVID-19, we took and tested a blood sample for evidence of infection.

A woman exiting a store with signs showing mask requirements on the door.
Based on current evidence, many places across the U.S. have some form of mask requirements. AP Photo/LM Otero

Mask-wearing reduced COVID-19

The first question my colleagues and I needed to answer was whether our efforts led to increased mask-wearing. Mask usage more than tripled, from 13% in the group that wasn’t given masks to 42% in the group that was. Interestingly, physical distancing also increased by 5% in the villages where we promoted masks.

In the 300 villages where we distributed any type of mask, we saw a 9% reduction in COVID-19 compared with villages where we did not promote masks. Because of the small number of villages where we promoted cloth masks, we were not able to tell whether cloth or surgical masks were better at reducing COVID-19.

We did have a large enough sample size to determine that in villages where we distributed surgical masks, COVID-19 fell by 12%. In those villages COVID-19 fell by 35% for people 60 years and older and 23% for people 50-60 years old. When looking at COVID-19-like symptoms we found that both surgical and cloth masks resulted in a 12% reduction.

The body of evidence supports masks

Before this study there was a lack of gold-standard evidence on the effectiveness of masks to reduce COVID-19 in daily life. Our study provides strong real-world evidence that surgical masks reduce COVID-19, particularly for older adults who face higher rates of death and disability if they get infected.

Policymakers and public health officials now have evidence from laboratories, models, observations and real-world trials that support mask-wearing to reduce respiratory diseases, including COVID-19. Given that COVID-19 can so easily spread from person to person, if more people wear masks the benefits increase.

So next time you are wondering if you should wear a mask, the answer is yes. Cloth masks are likely better than nothing, but high-quality surgical masks or masks with even higher filtration efficiency and better fit – such as KF94s, KN95s and N95s – are the most effective at preventing COVID-19.

Laura (Layla) H. Kwong does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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The Bloc’s Secrets of Success: 5 Ways The Health Creative Agency Won 200 Awards

As a global pandemic has reshaped society, The Bloc has been at the forefront of changing not just what stories get told about healthcare, but how they are told. In doing so, the health creative agency has won more than 200 film and advertising awards…

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The Bloc’s Secrets of Success: 5 Ways The Health Creative Agency Won 200 Awards

The Bloc achieved unprecedented levels of acclaim and recognition by embracing creativity, racial justice, technology, new practices, and people

New York, NY, September 22 – Over the past two years, The Bloc has redefined health creative to become one of America’s most talked about agencies. As a global pandemic has reshaped society, The Bloc has been at the forefront of changing not just what stories get told about healthcare, but how they’re told. In doing so, they’ve won over 200 film and advertising awards in 2020 and 2021. Recently, The Bloc became the first ever health agency listed on the “Of The Year” ranking for the entire Cannes Lions International Festival of Creativity. In addition, The Bloc is a founding member of The BlocPartners, the acclaimed global network of independent health creative agencies. The BlocPartners recently placed second in the “Health Network of the Festival” category at the Cannes Lions Health Festival.

The Bloc CEO Jennifer Matthews (PRNewsfoto/The Bloc)

“The work we’ve been so awarded for lately has been a natural extension of our motto ‘Be Great to Do Good,’” said Jennifer Matthews, CEO at The Bloc. “Health is life. It deserves the very best in creative excellence.”

  1. Invest in Hollywood Level Filmmaking 

A man walks through a futuristic train station, suffering from a cough, and decides to seek help from an automated doctor. That’s the premise of The Bloc’s award-winning short film Instant Doctor. Made so as to give thanks to doctors and released on National Doctor’s Day (March 30, 2020), the film highlighted the importance of the human element in healthcare by showing a world where medicine is done via machines.  

Instant Doctor won the Grand Jury Award for Best Short at the New York International Film Awards and was declared the Best Sci-fi Short Film at the 2020 Rhode Island International Film Festival.

“Instant Doctor has shown the industry that healthcare advertising can have not just the production quality but also the storytelling excellence of Hollywood movies,” said Bernardo Romero, Chief Creative Officer at The Bloc. “Healthcare has never been more important, which means health creative should be of the same quality as what you would see in a movie theatre or stream on Netflix.”

  1. Tackle the Biggest Issues – Including Racism and Racial Bias in Healthcare

Some of The Bloc’s most acclaimed recent work has centered around racial justice, both in healthcare and in the broader world. 

In early 2020, The Bloc, in partnership with acclaimed ballet dancer Ingrid Silva’s EmpowHer New York, released “The Call,” a short film where an actress went undercover on nursing advice hotlines to expose racial disparities in healthcare treatment. 

The Bloc went on to work with Ingrid on two more films. First came Skindeep, an animated story about racial trauma told through watercolor frames by Black women illustrators. Skindeep was followed by Making Space, a documentary about Ingrid’s life journey which premiered at Cannes Lions. 

In partnership with the National Black Child Development Institute, The Bloc created ABC’s of Survival, a tear-apart book for black children and their parents. The book aims to support mental health and change laws by including postcards that can be sent to congress. The ebook can be found at abcsofsurvival.com.

  1. Hire and Promote the Best People

The Bloc continues to grow rapidly and has recently hired Stuart Goldstein as COO and promoted Antoinette Bobbitt to EVP, strategy director. Stuart will be The Bloc’s first COO, and he’ll oversee the management for over 4,500 projects a year, with the goal of increasing efficiency and profitability. Meanwhile, Antoinette will ensure that The Bloc’s competitive differentiation is present in all client work.

The Bloc’s commitment to its employees was underscored this summer when Fortune magazine listed it as one of the best workplaces in New York for 2021. The Bloc is one of three advertising agencies on the list, and the only health creative agency focused exclusively on health.

  1. Get High Tech

More and more agencies are realizing that their creative skills can be used to power tech innovations, and The Bloc has focused on the development of tech to address pressing health needs. At the beginning of the pandemic, The Bloc pioneered SafeCode, a device concept which combined a bar-code scanner with UV light to help stop the spread of disease on delivery packages. 

The Bloc has also created a tool to aid mental health. At the end of 2020, they worked with Rockwell Ventures to create Scrollaby, an app which takes the habit of “doomscrolling” and turns it into a sleep aid, with over 1,000 pieces of custom content that support rest and relaxation.

  1. Rethink Agency Practices

To expand upon the capabilities it has developed, The Bloc has established new practice areas that distinguish it in the healthcare agency space.

One new practice area is The Bloc Science Foundry, which applies behavioral science and scientific expertise to medical communications. The other is The Bloc Storytellers

And this year, The Bloc announced its Storytellers department, which is dedicated to bringing unsurpassed production and narrative quality to healthcare creative. Storytellers seeks to replicate the success The Bloc has had with The Call, Skindeep, and Instant Doctor. The Bloc is currently searching for the best creative minds from the film, theater, and TV industries to join their team. Resumes can be sent to storytellers@thebloc.com.

 

About The Bloc

The Bloc is a leading independent health creative agency in the United States. Celebrating 21 years in 2021, The Bloc delivers comprehensive omnichannel communications for audiences across the health spectrum and partners with innovative clients who are doing some of the most meaningful and exciting work in health today. A founding member of The BlocPartners, the leading global network of independent health creative agencies, The Bloc’s work has been globally recognized for creativity and innovation. For more information, visit www.thebloc.com.

 

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